Versatile Mobile Systems (Canada) Inc.

Versatile Mobile Systems (Canada) Inc.

November 08, 2005 04:00 ET

Versatile Reports Record First Quarter

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 8, 2005) -

Provides guidance for the 2006 fiscal year

Versatile Mobile Systems (Canada) Inc. (TSX VENTURE:VMS) today announces its results for the three months ended September 30, 2005.

Revenue for the three months ended September 30, 2005 was $16,783,309 compared to $3,811,909 for the same period last year, an increase of 440%. The loss for the quarter was $41,043 ($0.00 per share) compared to a loss of $642,097 ($0.01 per share) for the comparable quarter last year. Included in the loss for the current quarter was research and development expense of $467,040, interest expense of $132,513 and approximately $100,000 relating to integration, branding, new website and other transitional costs.

"We are approaching our goal of profitability with a quarter that has generated record revenue," said John Hardy, Chairman and CEO of Versatile. "Given the cyclical nature of our business this is a great start to the fiscal year."
Highlights of the first quarter included:

- Revenue of $16,783,309, a record for the Company and up 440% over the same period last year.

- Net earnings before other items of $35,071 compared to a Net loss before other items of $567,927 for the same period last year.

- The launch of Mobiquity Transaction Engine 3.0™, which enables customers to enhance organizational security of their data and assets by integrating and interpreting data feeds from multiple sources including:

- Directory Services
- Identity management systems
- Security systems
- Financial transactions

This product delivers increased business intelligence by linking related data collected from different systems such as RFID, IDM, GPS, Credit Card or CRM. By way of example, the Mobiquity Transaction Engine 3.0™ enables the integration of RFID and Directory Services to provide real time monitoring of physical asset movement.

- Completing the product integration and the re-branding of the Company and its products.

- Being named one of Canada's 50 fastest growing technology companies in the 2005 Deloitte Canadian Technology Fast 50 Program.

- The launch of a new website

Technology Inves™ent

For the first quarter, the research and development expense increased to $467,040 compared to $167,160 during the same period last year. This inves™ent does not contribute directly to revenues during the period that the research and development expenses are incurred. During the quarter Versatile had many new product initiatives, along with feature improvements to current product lines including:

- The launch of Mobiquity Transaction Engine 3.0™ as outlined above.

- The transition of its PHP portal technologies to a JAVA platform branded as the Versatile Port™, consolidating the platform for the Versatile AutoStore™ and Versatile Retail™ solutions.

- Extension of Customer Relationship Management and reporting functionality for the Versatile AutoStore™ and Versatile Retail™ solutions.

Financial Position

At September 30, 2005 the Company had cash and cash equivalents of $1,303,328, an increase of $1,119,730 over the balance at June 30, 2005, and an unused credit line of $3,483,300 (U.S. $3,000,000). The working capital deficiency at September 30, 2005 was $8,674,157 (June 30, 2005 - $9,393,352), which is substantially comprised of the Promissory Notes due to the Vendors of $5,650,687 and the Bank Term Loan of $3,192,169 relating to the acquisition of the Perfect Order business. The Promissory Notes includes $774,067 (U.S. $666,666) that are due on November 30, 2005 and $4,876,620 (U.S. $4,200,000) that are due on or before April 25, 2006. The ability of the Company to continue operations on an ongoing basis will be dependent on its ability to continue to generate sales, attain profitable operations, maintain margins, control operating expenses and pay its obligations as they become due.

Financial Guidance for fiscal 2006

The following guidance for the fiscal year ending June 30, 2006 reflects our current expectations. Inherent in this guidance are risk factors that are described in detail in our regulatory filings which can be found at Our actual results could differ materially from those presented below. All figures are approximations based on management's current beliefs and assumptions.

Revenues $72 million to $74 million

Net Earnings before Other items $1 million to $1.5 million
(Other items include non cash charges, interest and current
income taxes)

About Versatile

Versatile provides business solutions that enable companies to improve sales, marketing and distribution of their products. By using Versatile's technology, companies in the consumer packaged goods, and transportation industries have gained the benefits of supply chain visibility, shortened fulfillment cycles and improved customer satisfaction. Versatile also provides information technology services for the implementation, maintenance and security of mission-critical computing environments. Versatile has the ability to architect solutions involving both proprietary and third party components. Versatile's international customer list includes Cadbury Schweppes, Kellogg, Motorola, Tyco (AMP), Comcast, Adelphia Communications, Time Warner (AOL), Mellon Financial, Albertsons, Michaels, Nordstrom, Astra Zeneca, and Bristol Meyers Squibb. For more information go to

Forward-Looking Statements

This document may contain forward-looking statements relating to Versatile's operations or to the environment in which it operates, which are based on Versatile's estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict or are beyond Versatile's control. A number of important factors including those set forth in other public filings could cause actual outcomes and results to differ materially from those expressed in these forward looking statements. Versatile's revenues and earnings can fluctuate due to a number of factors, including the timing of substantial orders, the timing of releases of new products, timing of the deployment of solutions for customers and delays by customers. As the operating expenses, which are determined based on anticipated sales, are generally fixed and are incurred throughout each fiscal quarter, any of the factors listed above can cause significant variations in Versatile's revenues and earnings in any given quarter. Consequently readers should not place any undue reliance on such forward-looking statements. In addition, these forward looking statements relate to the date on which they are made. Versatile disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

(C) 2005 Versatile Mobile Systems (Canada) Inc. All rights reserved.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Versatile Mobile Systems (Canada) Inc.
    John Hardy
    Chairman and CEO
    1-800-851-1281 or 1-206-979-6760
    Versatile Mobile Systems (Canada) Inc.
    Fraser Atkinson
    (604) 683-2915 Ext. 214